Can You Get a Stamp Duty Refund if Your Previous Home Sale Falls Through?

The Problem — Surcharge Paid, But Old Home Not Sold

You completed on your new home, paid the 5% additional dwelling surcharge, and were looking forward to reclaiming it once your old home sold. Then the sale fell through. Your buyer pulled out, the chain collapsed, or some other unforeseen event prevented completion of the sale.

This is an unfortunately common scenario. It does not, by itself, give you a right to a refund — but it does not necessarily mean the surcharge is gone forever either. What matters is whether you can sell the previous home before your 36-month deadline expires.

The Clock Keeps Running Regardless

The most important thing to understand is that the 36-month window runs from the completion of your **new purchase**, not from anything that happens subsequently. A failed sale of the old property does not pause, reset, or extend the clock in any way.

If you completed on your new home on 1 June 2024 and your buyer pulled out in February 2026, you still have until 1 June 2027 to complete a sale of the old property. That might be more time than you think — or less, depending on market conditions.

Is There Any Discretion at HMRC?

There is no statutory discretion for HMRC to extend the 36-month window because a sale fell through. The rules are clear, and HMRC does not have a formal mechanism to extend the deadline for genuine hardship or misfortune short of legislation.

The only exceptions ever made were the COVID-19 extensions that applied to transactions with deadlines falling in 2020–2022 — and those extensions have now ended. For any 36-month window expiring in 2025, 2026 or beyond, standard rules apply without exception.

What You Should Do If Your Sale Falls Through

**Act quickly.** The moment a sale collapses, your priority is to relist the property, agree a new sale, and work towards completion within the remaining window. Time spent not marketing the property is time wasted.

**Communicate with your solicitor.** Ensure they understand the 36-month deadline and that the new sale needs to complete (not just exchange) within the remaining period. They should be tracking this on your behalf.

**Consider your pricing.** If the previous sale fell through at a particular price, reconsider whether the asking price needs to be adjusted to secure a reliable buyer quickly. The cost of a price reduction may be significantly less than losing the surcharge permanently.

**Keep records.** Document all the steps you are taking to sell the property. Although HMRC has no formal discretion to extend the window, records could be relevant if you ever make a parliamentary ombudsman complaint on the basis that HMRC previously gave you incorrect advice.

**Explore all disposal options.** The 36-month rule requires a "disposal" of the previous home — this does not have to be a standard open market sale. A transfer to a family member, a gift, or a sale at undervalue could also constitute a disposal. Seek legal advice before proceeding with any non-standard disposal.

If the Window Is About to Expire

If you are approaching the 36-month deadline and a sale has not completed, consider:

• Accepting a lower offer to secure a quick completion
• Exploring whether any form of disposal (gift, transfer) is feasible and legally appropriate
• Taking urgent specialist tax advice on your specific position

There is very little HMRC can do after the window expires, but a specialist adviser may identify options that are not immediately obvious.

Use our Stamp Duty Refund Calculator at Property Passport UK to confirm the exact surcharge amount at stake — knowing the precise figure helps you make an informed decision about how urgently to act and what price reductions might be worthwhile to secure a sale within the window.